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IP Bulletin, January 2011

Looking Back: A Review of IP Events in 2010As the intellectual property (IP) community begins a new year, Nutter provides a look back at the highlights of 2010. In the past year, IP law continued to evolve and increase in importance. Both the United States Patent Office (USPTO) and the Federal Circuit addressed important issues, and their decisions will have a lasting impact on applicants and practitioners. Nutter’s review covers a wide range of topics, including gene and business method patents, inequitable conduct, and patent term adjustment.

Supreme Court Grants Cert in Case Considering Patent Validity StandardOn November 29, 2010, the Supreme Court granted certiorari to the third patent law case in the current term by accepting Microsoft’s petition in Microsoft Corp. v. i4i L.P. Microsoft is appealing a $290 million verdict from the Eastern District of Texas concerning infringement of i4i’s U.S. Patent No. 5,787,449 by Microsoft’s Word 2003 and 2007 software programs. Microsoft is challenging the clear and convincing evidence standard that has been associated with the invalidity defense under 35 U.S.C. § 282 since the Federal Circuit’s 1984 decision in American Hoist & Derrick Co. v. Sowa & Sons, Inc. Microsoft contends that the correct evidentiary standard should be “preponderance of the evidence” when an invalidity defense relies on prior art that was not originally before the USPTO. The Court’s decision in this case could significantly impact the strength of any patent owner’s case if the burden to prove invalidity is lowered.

Business Method Patents Abroad: Developments in Australia and Canada2010 was perhaps a momentous year for business method patents in Australia and Canada with two potentially precedent-shifting decisions. Australia appears to have set the stage for further elucidation of computer software patentability requirements in the Invention Pathways decision. Closer to home, Canada appears to be opening up to the possibility of business method patents in an appeal decision of the denial of Amazon's one-click patent.

Supreme Court Affirms Ninth Circuit without Opinion in Costco CaseThe Supreme Court issued a per curiam decision in Costco Wholesale Corporation v. Omega S.A. on December 13, 2010. The case concerns Omega’s attempt to prevent Costco from buying authentic Omega watches from resellers abroad and importing them for sale in the U.S. Because the goods at issue are authentic, Omega cannot attack the practice on counterfeiting grounds. Instead, Omega relies on a small copyrighted emblem placed on the underside of every watch to attack Costco’s practice using the right to control distribution of a work that is conferred by the Copyright Act. Costco’s defense hinges on the first sale doctrine, which prevents copyright owners from controlling re-sales of their goods by purchasers. The equally divided court affirmed the 2008 decision of the Court of Appeals for the Ninth Circuit without any opinion. The court’s equal division was possible because Justice Elana Kagan recused herself as a result of her earlier involvement in the case as Solicitor General. The Court’s affirmation lets stand the Ninth Circuit’s decision that copyrighted goods manufactured abroad are not “lawfully made” under the Copyright Act and are therefore not subject to the first sale doctrine. This means copyright owners who manufacture goods abroad can control their importation into the U.S., even after their initial sale. The decision may have far-reaching implications, as it appears to provide more protection to goods manufactured abroad than to those made in the U.S. However, the even split of the court, the absence of an opinion, and the fact that this question remains unresolved with respect to other intellectual property may indicate that this issue has not been considered for the last time.

Design Patents Post Egyptian GoddessIn 2008, the Federal Circuit issued its landmark decision regarding design patent infringement in Egyptian Goddess v. Swisa. In the subsequent two years, how exactly has the landscape of design patent infringement changed, and are interested parties satisfied with the changes? Read on for Nutter’s analysis.

I Sing of Trademarks as Keywords: Am I In Key, or Off Key?The application of old law to new technology is always an interesting and newsworthy challenge. One of the latest trademark applications generating case law and headlines is a competitor’s use of trademark terms as search engine keywords. Is such a practice trademark infringement, or competition fair game? Considering human tendencies, along with analogies to the offline world, can lead to the same conclusion as many of the courts that have considered the issue.

Federal Circuit Reaffirms its Prometheus Decision in Light of BilskiLast month, in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, the Federal Circuit reaffirmed its prior holding that Prometheus’ claims directed to methods for optimizing the therapeutic efficacy of certain drugs represent patent eligible subject matter under 35 U.S.C. § 101. The case is interesting because the Federal Circuit issued its first decision prior to the Supreme Court’s ruling in Bilski v. Kappos, and this new decision considers the same issue post-Bilski. While the case does not break any new ground with respect to patent eligible subject matter or business method patents, it does indicate that applicants who draft claims with the machine-or-transformation test in mind can likely avoid Section 101 issues.

USPTO Extends its Bump-and-Dump Program for Additional YearThe March and July, 2010 issues of Nutter’s IP Bulletin reported on the USPTO’s Patent Application Backlog Reduction Stimulus Plan, more colloquially known as the “Bump and Dump” program. On November 22, 2010, the USPTO announced that the program is being extended through December 31, 2011, or until 10,000 petitions have been granted, whichever occurs earlier. The program provides an applicant the opportunity to “bump” one application up in the examination queue if they agree to “dump” (i.e., abandon) another pending unexamined application. Applicants should consider reviewing their portfolios and determining if any applications awaiting a first Office Action, or any future filings, are appropriate for this expedited process.

Nutter's IP Bulletin is a bi-monthly publication of the Intellectual Property Practice at Nutter McClennen & Fish LLP in Boston. This edition of the bulletin was edited by Derek P. Roller. For further information, please contact your Nutter attorney at 617-439-2000.

Recognized as a “Go-To” patent firm by IP Law & Business and Corporate Counsel, Nutter is dedicated to making its clients’ strategic goals a reality and to maximizing the protection and value of their intellectual property. The firm has a long track record as the trusted IP advisor to innovative public and private companies, medical institutions and research universities, investors, entrepreneurs and inventors.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.